Steelmaking raw material prices mixed through May

Written by Brett Linton

Steelmaking raw material prices have moved in different directions over the past month, according to SMU’s latest analysis.

Through May 23, prices for iron ore and pig iron slightly increased month on month (m/m), while zinc prices surged 10%. Busheling scrap prices were unchanged from April, while shredded scrap, coking coal, and aluminum prices all saw modest monthly declines. Raw material prices are flat to down compared to three months prior, aside from gains seen in zinc and aluminum.

Table 1 summarizes the price changes of the seven materials considered in this analysis. It reports the percentage change from one month, three months, and one year prior for each product.

Iron ore

Following a 19-month high seen in January, the import price of 62% Fe Chinese iron ore fines had been moving lower up until about a month ago. Since mid-April we have witnessed a rebound in prices, with iron ore reaching a 2.5-month high in early-May of $119 per dry metric ton (dmt) delivered North China. This week’s price is down slightly to $117/dmt. Iron ore prices are 11% higher than levels seen this time last year.

Coking coal

Premium hard coking coal prices have trended downward since the start of the year, somewhat stabilizing across May. The latest weekly price is $238/dmt. Coking coal prices have eased 5% in the last month and are 24% lower compared to levels three months ago. Prices are 7% higher than tags one year ago.

Pig iron

Pig iron prices have been relatively stable since last August. Prices rose 3% from April to May to $460/dmt, now the highest level seen since February. Pig iron prices are down 14% compared to this time last year. Recall that pig iron prices had jumped more than 60% in April 2022 following the invasion of Ukraine by Russian forces, reaching a historic high of $975/dmt.

Note: Most of the pig iron imported to the US had come from Russia, Ukraine, and Brazil. This report uses Brazilian prices and averages the FOB value from the north and south ports.


Following their December peak, steel scrap tags have remained relatively steady since March, both nearing seven-month lows as of May. SMU’s busheling scrap index held steady in May at $410 per gross ton (gt). Shredded scrap slightly eased from April to average $390/gt in May. Scrap prices are down 4-11% compared to levels one year ago.

Changes in the relationship between scrap and iron ore prices offer insights into the competitiveness of integrated mills, whose primary feedstock is iron ore, compared to mini-mills, whose primary feedstock is scrap. Figure 5 shows the prices of mill raw materials over the past three years.

To compare these two feedstock materials, SMU divides the shredded scrap price by the iron ore price to calculate a ratio (Figure 6). A high ratio favors the integrated producers and a lower ratio favors the mini-mill/EAF producers. Integrated producers had mostly held the cost advantage from late-2021 through mid-2023. The advantage then briefly shifted to EAF producers, but began trending higher in December. The ratio as of May 21 is currently in relatively neutral territory at 3.33, just slightly favoring EAF producers.  

Zinc and aluminum

Zinc is used in galvanized and other coated steel products. Spot prices had stabilized in mid-2023 after reaching multi-year lows. The LME cash price for zinc has ramped up in the last six weeks, now at $1.36 per pound as of May 23. This has prompted some mills to increase their galvanized coating extras. Zinc prices are up 10% m/m and are up 28% from levels three months prior. Compared to this time last year, zinc prices are up 27% (Figure 7).

Aluminum prices, which factor into the price of Galvalume, had also stabilized in mid-2023. We recently saw a surge in March and April, with prices hovering around $1.12-1.20 per lb. throughout May. The latest LME cash price is $1.16 per lb., down 1% from one month ago but 18% higher than tags three months prior. Prices are up 15% from levels one year ago. Note that aluminum spot prices sometimes have large swings and return to typical levels within a few days, as seen in Figure 7 below.

Brett Linton

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